Question
Abe has just become a product manager for Brand X, which has a retail price of $1. Brand X and its direct competitors sell a
Abe has just become a product manager for Brand X, which has a retail price of $1. Brand X and its direct competitors sell a total of 20 million units annually; Brand X has 24% of this market.
Variable manufacturing costs for Brand X are $0.09 per unit. Fixed manufacturing costs are $900,000. The advertising budget is $500,000.The Brand X product manager's salary and expenses total $35,000.Salespeople are paid entirely by a 10% commission of the retail price. Shipping cost, breakage, insurance, and so forth are $0.02 per unit.
What is the $ unit contribution margin for Brand X?
What is Brand X's breakeven point?
What market share does brand X need to break even?
What is Brand X's profit?
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